Exam 6: Ratio Analysis 1: Profitability, Efficiency, and Performance

Which of the following factors will increase the gross profit % of an academic book publisher? Please select all that apply.

The lower the dividend cover ratio, the more secure the dividend.

In the financial statements for the year ended 30 September 2019, Diego Limited reported revenue of £500,000, operating profit of £200,000, finance expense of £50,000 and a taxation charge of £30,000. What is Diego Limited's profit before tax % for the financial year ended 30 September 2019?

Which one of the following statements does not describe a feature of the profit before tax %?

The market value of one ordinary share in Alberto plc is 600 pence. The profit before tax for the company's latest financial year to 30 September 2019 is £20m. Tax is charged on profit before tax at the rate of 25%. Alberto plc has ordinary share capital of £5m made up of shares with a par value of 20 pence each. Alberto plc has no preference shares in issue. What is Alberto plc's P/E ratio?

The operating profit % for Jatin Limited has risen this year. Which of the following statements would not be a potential explanation for the increase in operating profit %?

For the year ended 31 March 2020, Parvinder plc has a profit before tax of £8.0m, an income tax charge of £2.0m, and issued ordinary share capital of £2.0m made up of 25 pence shares. What are Parvinder plc's earnings per share for the year ended 31 March 2020?

Which of the following factors will increase the profit before tax % of a bank? Please select all that apply.

At 1 October 2018, Jennifer, a market trader, had inventory which had cost her £15,000 to buy. During the financial year ended 30 September 2019, Jennifer made further purchases of goods for resale on her market stall at a gross cost of £125,000. Her suppliers gave her discounts of £1,200 on her purchases during the year. During the financial year ended 30 September 2019, Jennifer made sales of £250,000 while incurring van running costs of £20,000 and paying the local council £8,000 in rent for her market stall. At 30 September 2019, Jennifer had inventory on hand which had cost her £16,800 to buy. What is Jennifer's gross profit % for the financial year ended 30 September 2019?

For the year ended 31 December 2019, Manjinder plc has a profit after tax of £5.0m. Issued share capital of £4.0m is made up of 4 million 50 pence preference shares which carry a dividend rate of 6% and ordinary share capital of £2.0m made up of shares with a par value of 10 pence each. What are Manjinder plc's earnings per share for the year ended 31 December 2019?

During the financial year ended 31 March 2020, Marie Limited generated sales of £148,000. The company allowed its customers discounts of £5,000 (£2,000 of which were not taken up by customers who paid the full price for the goods supplied) while the cost of sales was £74,000. Selling and distribution costs totalled up to £15,000 and administration expenses incurred came to £21,000. Interest of £6,000 was paid to the bank. What is Marie Limited's operating profit % for the year ended 31 March 2020?

The lower an organization's revenue and profit per employee, the more efficiently the organization is working to generate returns to satisfy the business's objectives of profit and revenue growth.

The ratio that expresses the distribution per share for a financial period is called the:

Jingwen plc paid a dividend of 7 pence per ordinary share on 31 March 2019 and a dividend of 21 pence per ordinary share on 31 October 2019. Earnings per share for the financial year to 31 December 2019 were 42 pence. The current market price of one ordinary share in Jingwen plc is 350 pence. What is Jingwen plc's dividend yield?

During the financial year ended 31 August 2019, Xiao plc paid total dividends of £480,000 including £120,000 of preference dividends. Xiao plc has £1,000,000 of ordinary share capital made up of shares with a par value of 25 pence. Earnings per share for the financial year ended 31 August 2019 were 24 pence. The current market price of one ordinary share in Xiao plc is 300 pence. What is Xiao plc's dividend yield?

Which one of the following statements describes the profit before tax %?

The pay-out ratio is calculated by dividing:

Trickey Limited has total sales for the year ended 31 August 2019 of £500,000. Inventory at 1 September 2018 was £65,000. Purchases of goods during the year amounted to £320,000 and discounts received were £10,000. Gross profit percentage for the year was 40%. What is the value of closing inventory?

For the financial year ended 31 January 2020, Zainab Limited reported sales of £650,000 and a gross profit of £260,000. Selling and distribution costs totalled up to £54,000 and administration expenses incurred came to £76,000. Finance expense was £7,500 and finance income received was £2,500. The company incurred an irrecoverable debt of £10,000 and the tax charge on the profit for the year was £23,000. What is Zainab Limited's operating profit % for the year ended 31 January 2020?

Dividend cover is calculated by dividing: